Bim-vindos a Lisboa! (Welcome to Lisbon!)

1. Hardwood Marketsin Europe and United Statesin 2002 and 2003By Ed PepkeProject LeaderForest Products Marketing ProgrammeUN Economic Commission for Europe andFood and Agricultural OrganizationGeneva, Switzerland

2. Bim-vindos a Lisboa!(Welcome to Lisbon!)

3. Program • Hardwood markets: US and Europe • Promotion and issues • Panel discussion on above • Hardwood consumption realities • Panel discussion • Dimension and component opportunities • Breakout sessions by country groupings • Country reports in plenary

4. Announcements • Turn off mobile telephones, please • Governed by US anti-trust laws • Speakers requested to respect timing • Audience requested to respect timing too • Hold questions for panel discussions

5. Content of presentation • Overall market developments, 2002 & 2003 • Overall • Hardwoods • Certified forest products • Other forest products markets • Hardwood production, consumption and trade • Promotion necessities

6. Sources of info • UNECE/FAO TIMBER database (forest products statistics) • FAOSTAT Forestry Database website • UNECE/FAO Timber Bulletin, “Forest Products Annual Market Review, 2001-2002” • Timber Committee market forecasts and statement, 2002-2003

7. Overall market conditions, highlights of Forest Products Annual Market Review, 2001-2002 • Viable forest products markets, supported by policy reforms, underpin sustainable development in some central and eastern European countries (CEECs). • Following 10 years of growth, consumption of primary-processed forest products in the UNECE region declined sharply in 2001. • Consumption of wood products in the CIS, notably Russia, gained 7% in 2001.

8. Overall market conditions, highlights of Forest Products Annual Market Review, 2001-2002 • North American markets were buoyed up by extraordinary strength of US housing-related demand for wood products. • Market effects from Europe’s 1999 windstorms still affected markets. • Strong US$ influenced 2001 markets, and weakened $ in 2002 is changing competitive positions and trade. • Structural change in US and western European furniture manufacturing.

9. Overall market conditions, highlights of Forest Products Annual Market Review, 2001-2002 • Certified forest product markets growing, but remain small compared to surge in certified forest area. • Panel markets expanded in 2001, achieving new records for OSB and MDF. • Cross sectoral policy issues directly influence forest products sector.

10. Timber Committee Market StatementGeneral Forecasts for 2002-2003 • Following record levels in 2000, a downturn in forest products markets occurred in the UNECE region in 2001. • Weak economic conditions in North America and Europe persist in 2002. • Central and eastern European and CIS (ex-USSR) forecast rising consumption, production and trade. • Slight improvement forecast for 2003.

11. Timber Committee Market StatementGeneral Forecasts for 2002-2003 • Encouraged countries to work together to achieve maximum benefits from promotional efforts. • Promoting sound use of wood is important to maintain and increase wood’s market share. • International approaches to wood promotion are importaqnt to ensure sustainable markets, a vital component of sustainable forest management.

12. Certified Forest Products

13. Timber Committee Certified Forest Products Forecasts for 2002-2003 • Certified forestland increased by 25% in UNECE region in 2002. • 90% of world’s certified forests are in the UNECE region. • Most of the markets for CFPs are within the region.

14. Timber Committee Certified Forest Products Forecasts for 2002-2003 • Current problems include weak market demand, lack of mutual recognition, lack of chain of custody. • Many products from certified forests are being sold without labels.

15. Timber Committee Hardwood Lumber Forecasts for 2002-2003 • US exports forecast to leap 22% in 2002. • US exports to reach record 3.2 million m3. • Largest export market for US is now China. • Some US exports reimported in furniture. • More optimism in central and eastern (CEECs) than western Europe. • Value-added exports increasing for CEECs and tropical countries.

16. Hardwood lumber(also known assawn hardwood)

17. Hardwood highlights of Forest Products Annual Market Review, 2001-2002 • Total sawn hardwood production in the UNECE region declined in 2001. • Sawnwood production increased significantly in central and eastern European countries. • Production remained constant in western Europe. • Drop in western European production attributed to 1999 windstorms oversupply.

18. Highlights of Forest Products Annual Market Review 2001-2002 • Exports for the UNECE region were down by 5%. • UNECE region imports of sawn hardwood in 2001 were down by 6%. • Apparent consumption in the UNECE region fell from its 2000 peak. • Central and eastern European countries consumption of sawn hardwood is increasing.

19. Highlights of Forest Products Annual Market Review • Events of 11 September 2001 accentuate reduced demand. • Rapid development of Asian furniture industries affecting hardwood trade and furniture production in UNECE region. • Markets affected by currency exchange rates. • Environmental issues, certification, legality, getting press.

20. Europe: Sawn hardwood

21. Europe: Hardwood lumber

22. North America: Sawn hardwood

23. North America: Hardwood Lumber

24. USA Hardwood Lumber Forecasts

25. USA Hardwood Lumber Forecasts

26. Comparison toother forest products marketsin 2002-2003

27. Europe: Softwood lumber

28. Europe: Softwood lumber

29. North America: Softwood lumber

30. North America: Softwood lumber

31. North America: Paper and paperboard

32. North America: Paper and paperboard

33. Europe: Paper and paperboard

34. Europe: Paper and paperboard

35. Europe: MDF

36. North America: MDF

37. North America: Particleboard

38. Europe: Particleboard

39. Promotion offorest products

40. Annual change in forest area, 1990-2000 Africa Europe N & C America Oceania Asia South America

41. Forest resources summary • Removals considerably below growth in UNECE region. • Wide variance in utilisation rates of NAI. • Growing stock increasing in Europe. • Oversupply compared to demand for wood. • Increasing alternative demands on forests.

42. Growing too much wood? • Not enough wood products demand? • What are the solutions?

43. Grow the wood markets ! • Guarantee that today’s wood products meet consumers’ needs • Develop new products to meet evolving needs • Develop new markets for wood products (substitute for non-renewable materials)

44. How can we grow the wood markets? • Through coordinated, international promotion programs • Example: the FAO-ECE Forest Communicators Network creates a positive image of the forest and forest industries sector by: • networking among members • identifying key common messages and concepts • building of PR capacity

45. Findings on the market effects of wood promotion from Forest Products Annual Market Review • Attitudes influenced by cultural and technical dimensions • Credibility is important quality • Key elements of promotional work • Competence • Neutrality • Sufficient financial resources

46. Findings on the market effects of wood promotion from Forest Products Annual Market Review • Fund raising a problem in fragmented industry • Multi-country promotions must overcome cultural differences • Wood promotion is a success story!

47. 2001 Timber Committee Market Statement • “In light of the economic downturn in 2001, the Timber Committee stated that it is imperative to develop new products to expand existing markets and to establish new markets to meet consumers’ needs. • The Committee reasserted the importance for the forest products industry to work internationally to promote the environmental advantages of the sustainable production of wood.”

48. 2001 Timber Committee Market Statement • “The Committee discussed the need to increase the wood culture in the UNECE region. • Delegates mentioned on-going national and subregional campaigns to promote the use of wood. • The Committee suggested coordinating efforts in order to achieve greater success.”

49. 2002 Timber Committee Market Statement • “Encouraged countries to work together to achieve the maximum benefits of their promotional efforts. • Multi-country promotion of the sound use of wood is important to maintain and increase wood’s market share.”

50. 2002 Timber Committee Market Statement • “Many effective communication strategies can be shared through collaboration between countries, trade associations and promotional groups. • These international approaches to wood promotion are important to ensure sustainable markets which are a vital component of sustainable forest management.”